Bank of Baroda currently going through fundamental repositioning

Bank's chairman says plans are in place to create more agile and capable organisation with better controls and complliance

State-owned lender Bank of Baroda has undertaken a comprehensive review of its business and has finalised a detailed set of plans to fundamentally reposition it for future, Chairman Ravi Venkatesan has said.

The lender has reported its worst year in 2015-16.

"These plans are intended to create a more agile and capable organisation with better controls and compliance," Venkatesan told PTI on the sidelines of its annual general meeting here over the weekend.

To raise capital, the bank will be selling its non-core assets gradually, he said.

For FY16, BoB reported a huge Rs 5,067 crore loss, which followed the asset quality review mandated by RBI that required the lender to go for a higher provisioning to cover bad loans.

Venkatesan said the management has conducted a detailed review of business portfolio and intends to gradually exit unprofitable businesses and segments to improve margins and free up capital that can be deployed for customers with a better credit profile and many good business opportunities that exist.

"We can expect to see the bank rapidly return to historical levels of profitability," he said.

Emphasising that technology will play a critical role in revitalising the bank, Venkatesan said "over the next few quarters, there will be a significant upgrade of capabilities in four key business areas".

He listed out the focus areas as re-engineering and automating core business processes, closing the gap in Internet and mobile banking, improving the bank's capabilities in big data and analytics and transforming into a more digitally-savvy lender.

"Unquestionably, the most important transformation that we need to make is the transformation of our people and organisational capability," he said.

To augment expertise, BoB has appointed some globally respected experts as advisors to advise the board on IT, HR, risk management and financial inclusion. This is part of the process of systematically strengthening the board, he said.

"I am optimistic that these changes will gradually bring about a sustainable improvement in the performance of the bank," he added.